Melinda A. Wormuth, center, arrives for arraignment with representatives from the Attorney General's Office and the FBI on Wednesday, Oct. 17, 2013, at Waterford Town Court in Waterford, N.Y. (Cindy Schultz / Times Union)

Halfmoon Supervisor Melinda A. Wormuth was arrested Thursday on state and federal criminal charges that allege she extorted cash payments to lobby state officials and stole $6,250 from a campaign account.

The federal charges were outlined in a grand jury indictment that accuses Wormuth of accepting three cash payments, totaling $7,500, to write letters to two state officials urging them to support the legalization of mixed martial arts fighting. The two-count felony indictment also charges Wormuth with lying to FBI agents when she claimed a former town justice had told her she could take the payments.

Two hours after she appeared in federal court, Wormuth, 46, was arraigned separately on state criminal charges in Saratoga County, including three felonies. The state charges allege she cashed seven checks made out to her campaign fund, "Friends of Mindy Wormuth," between 2009 and 2013. She is also charged with filing false statements with the state Board of Elections to cover up the alleged thefts.

U.S. Attorney Richard S. Hartunian called the case "an example of the culture of corruption which has no place in New York state public offices."

"Citizens trust their public officials to behave ethically, and it is a travesty when this public trust is broken," Hartunian said in a statement.

The arrest of Wormuth comes near the end of her tumultuous six-year reign as town supervisor. For years, Wormuth had been steadfastly supported by many of her fellow Halfmoon and Saratoga County Republicans, including state Sen. Kathleen Marchione, but that support began to dry up earlier this year.

In April, a divided Halfmoon town GOP committee voted to endorse a newcomer for supervisor, former Town Justice Kevin Tollisen, in a decision that left Wormuth reeling and bitter. She later said she would not challenge Tollisen in a primary but would finish her term that ends Dec. 31.

At her appearance in federal court, U.S. Magistrate Randolph F. Treece ordered Wormuth released on her own recognizance but restricted her travel to northern New York. Federal probation officers had requested that Wormuth undergo substance abuse counseling as a condition of her release, but Treece agreed to waive that requirement after one of Wormuth's attorneys, James C. Knox, argued that it was "excessive." There was no indication during the court proceedings why the probation officers wanted Wormuth to receive treatment.

Following her appearance in federal court, Wormuth was taken back into custody by state and federal investigators who brought her to Saratoga County to face felony charges related to the theft of campaign funds. Wormuth was arraigned in Waterford Town Court, instead of Halfmoon, because of her government and personal conflicts in Halfmoon, officials said.

Wormuth's husband, Larry, was by her side during both court appearances.

Waterford Town Justice Nancy M. Sunukjian allowed Wormuth to be released on her own recognizance.

The state charges allege Wormuth cashed $6,250 in checks that were written to her political campaign account during a four-year period.

A criminal complaint said that during an Aug. 14 interview with FBI agents, Wormuth conceded she knew it was wrong to cash and pocket the money from four campaign checks, each for $1,000, between April and August.

"She explained that she was 'bitter' about not receiving her political party's endorsement for re-election in November 2013," according to the criminal complaint filed by an investigator with the state attorney general's office.

The complaint states Wormuth told the FBI that "I never did anything like this before."

But investigators say that was also a lie. They claim bank and campaign records indicate Wormuth allegedly stole and cashed three campaign checks totaling $2,250 in 2009 and 2010.

E. Stewart Jones, a Troy attorney hired by Wormuth and her husband after they learned of the FBI investigation, has criticized the government's case.

"There is a clean, clear, plausible explanation that we will provide in due course and the charges do not represent, by any stretch of the imagination, a complete picture of what happened here," Jones said.

The federal indictment charges Wormuth with accepting cash payments from two unidentified people who were involved in an effort to promote legalizing mixed martial arts in New York.

She is accused of accepting payments, disguised as "consulting fees," for $2,500 on April 25, $3,000 on June 17, and $2,000 on Aug. 7.

The second count of the indictment charges Wormuth with lying to FBI agents when she "falsely stated that she had consulted with 'KT,' a former town justice in Saratoga County, to obtain approval for her actions before taking the payments."

The indictment alleges Wormuth's statements were false. Court records do not identify the former town justice. But Tollisen, an attorney who is running unopposed for town supervisor, said he "was absolutely shocked by the indictment and the reference to a former town justice 'K.T.' in Saratoga County. If it's any reference to me, it's a complete and utter lie."

The indictment says Wormuth actually consulted a different attorney about her interest in lobbying for mixed martial arts, but it does not identify the attorney.

"She had not consulted with K.T., but instead had consulted with a different attorney who had told her that she could only work in her spare time and could not use her office or take official acts in exchange for payments," the indictment states.

Halfmoon's town attorney, Lyn Murphy, said she can't discuss legal advice she may have given town officials or Wormuth.

In early May, Wormuth wrote letters on town letterhead to state Assemblyman James Tedisco and Sen. Marchione stating she "strongly urge(s) you to support MMA legislation."

"Some of my constituents are fans and promoters of MMA and have to travel outside the town of Halfmoon to promote or watch the sport they love," Wormuth wrote.

Marchione on Thursday said Wormuth's letter did not "in any way" affect her decision to support MMA, and that she supported legalizing the sport before receiving the letter.

The investigation also examined Wormuth's financial ties to builders and developers who had business before the town, although the criminal charges do not relate to that portion of the probe.

Bruce Tanski, a prominent Halfmoon builder, was interviewed by the FBI on Sept. 4 about tens of thousands of dollars he loaned Wormuth's husband, Larry, a few years ago. Tanski also has given thousands of dollars in political contributions to Wormuth and other Republican candidates.

Tanski declined comment on his interview with the FBI but has previously said he never received preferential treatment on his projects in Halfmoon, including from Wormuth.

Wormuth is a former Town Board member who was appointed Halfmoon supervisor in 2007.

Last month, a day after the Times Union first reported that Wormuth was the target of an FBI investigation, her fellow Republicans on the Town Board signed a letter calling her "ineffective" as a leader and demanding her immediate resignation.

Wormuth fired back in a statement, indicating she would not step down and referring to the newspaper's story as "inaccurate." A week ago, Wormuth told town officials she was taking a 30-day leave of absence for medical reasons.